MYTHS ABOUT OUR PENSION PLAN (2)

cupe1975Pensions

MYTH

Public sector workers like University workers have “gold plated pensions”

FACT

The plan pays a modest average annual pension of $18,100.

The plan also does not provide guaranteed cost-of-living increases for retirees (also known as “indexation”). Indexation is provided on an ad hoc basis and has generally been delivered out of surplus, when surplus exists. As the cost of living increases each year, retirees under the plan do not know if their pension cheques will keep pace each year. The employer does not bear any pension liabilities associated with this risk. Pensioners have actually not seen an increase since 2008. Their pensions have since lost nearly 20% of their real value by not keeping pace with the rising cost of living. Most University plans in Canada offer better inflation protection.